The market has been good to some people for the last 4 years. I highly emphasize the word *some*. I will get to the point. The market is a proxy for the overall economy and job market. Usually when the market is doing well, the job market and economy are also booming as well. From 2000 to 2002, there were many traders who were "shaken out" and left without jobs or capital. I hear far more disaster stories from that time period then anything else. While I believe a few traders made it out alive, the majority were shaken, stirred and scrambled. During that time period, many people in different industries were left unemployed. Many people believe that when the market turns bad then they will simply pursue other careers. However, if they do not have any other business skills or education, how will they find a good job in a downtrending market similiar to the 2000-2002 period. Now we are near a place in the market where interest rates are rising and the economy is called into question. A rate hike is in the cards. The last time the S&P 500 hit 1550, a similiar situation existed with Greenspan increasing rates and the economy looking quite questionable. In those days of long ago, there existed a similiar mix of traders as today. Sitting in the rows at the prop firms, sitting at home computers and telling themselves that they can go on doing this forever. However, there were times even before then where a similiar situation existed. There were traders in the 20s in "bucket shops", traders in the 60s, etc. All of them thought and believed the good times would persist. The nature of the market is one of musical chairs where you never know when the music will stop. Unfortunately, there are only a few chairs and a rather large crowd. To think and believe that money can be made forever by trading at a prop firm or behind a personal computer in your home is foolish. I believe someone should look at trading like any other boom such as housing. They should take advantage of the opportunity right now, but they should not have the attitude that this is a lasting career in which they can depend upon to pay bills and support a family. I always laugh at how each time the market turns up there are always those who come out of the woodwork who think they can make a career out of this. Ultimately, there are those that lose their minds and their shirts. My advice for those who might inquire is to get your MBA, get yourself a professional career and if you really hate dealing with people in an office then the problem is not with them, its with you. Part of the job of being a human being is effectively dealing with people no matter how strange they appear. If you cant deal with people in a business environment, then you must reflect on yourself and admit your shortcomings. Dont trade your own money. Go to a place like NYC where you can get yourself a job and work your way to trading other people's money. The vast majority of millionaires and billionaires made their cash through a business enterprise. They did not make it from behind a personal computer at their home or from sitting in the ghetto office of the prop firm. The last few years have been good, but dont count on it lasting forever...
On the other hand... I started "trading in front of the screen" in 1983. My first real-time rig cost $10,000 and didn't even have a hard drive (just 2, 720k floppies on an XT computer with a satellite dish). I couldn't get into medical school because I was "too old", thanks to 4 years in the military during the Vietnam war. Glad I didn't become a doctor... wouldn't have wanted to take the pay cut.... also would have been bad to go through life not knowing anything about money.. It took me until 1995 to build my capital enough to have the chance to make significant money (compounding, you know).... that was the 1st year I made $1 Million in my own account. I remember feeling giddy about it for 6 months*. A trading career is possible. * that was such a wonderful high... I wish all you ETers the tenacity to learn the craft and to experience it for yourselves.
nice post, gnome. i'm a n00b (8 yrs full time) compared to you, though i remember having a radio shack computer which didn't have enough memory to sort 800 names alphabetically, and i had to break it down to 2 400 name lists. there's some reasons in the original post why a person should be *careful* before taking trading as a career choice. i've advised a couple people in college to get the degree, have their fun and learn WHILE trading on the side, to build up a capital base. btw, original poster, you might want to contact this person about not taking trading as a career choice. have a good heart to heart, and all that sort of stuff. http://www.elitetrader.com/vb/showthread.php?s=&postid=1389749#post1389749
My first computer didn't even have a floppy drive... it had tape drive. My 2nd had a floppy, but only 32K of RAM... $5,000... LOL
I am a perpetually single individual and not sure if I will ever have kids or get married. Thats my choice and so my tolerance for risk is rather great. I wouldnt mind trading at a prop firm or a hedge fund, but it would not in my mind be a thing of permanence and certainly not something that I would do if I had kids and/or was married. It would be more of a romantic enterprise and when the honeymoon ends then a divorce would lay around the corner. As I grow older, I enjoy doing new things and wouldnt mind sitting in the ghetto at the prop firm seeing if I can trade successfully within their format or at a hedge fund working alongside the trademaster. However, for myself, it would be just a passing venture to satisfy curiosity like most things within my life. Im a smart guy. I know when a boom is a boom and that these things pass in time. Right now Im in the airport traveling to Phoenix to meet a man for my next venture. For myself, a career in trading is possible because of my responsibilities, but I know it would only last so long as the music stays on. Im shocked when good men come on here thinking and believing they can support a family and kids from the prospect of trading from a home computer out of their home. While there are a few success stories, its a risky enterprise at that and sitting at home computers all day long does not seem like an enjoyable thought. Im a speculator at heart and know that there is the start of any song and then an end. You have to be in on the pump, but not the dump. When I worked at Marcus and Millichap in Los Angeles many years ago, one of the successful brokers came out of his office and yelled at me stating that the business sucked and why would anyone want to do this. Unfortunately, he was already in the business and he was at a point where things could not be readily changed. He couldnt do anything else with his life, but sit in that office brokering big deals. Im confident that I would be successful at any business enterprise I entered into. I can walk into a room full of people and walk away with a grip full of business cards. Trading for myself is just a romantic enterprise and not a career choice.
like gnome proves... it takes time to become a real pro. I would say a minimum of 5-7 years or hard work. You wouldn't expect to be a surgeon or a top lawyer in 6 months. Any profession where you are making tons of money will take a lot of time and work to learn. It is VERY possible... I'm living proof, and I don't have any high flying degrees.
When I started, I was smitten with the leverage potential of the SP 500 contract. I thought "I'll gather all the information and distill it down to the good stuff". Over the years, I temporarily had notions of "what worked" only to have my confidence dashed. So, the more things I "threw out", the better I did... and it all eventually distilled down to this.... (drum roll, please) . . . . . . 1. Trading is like counting cards in black jack. You get the money out ONLY when you believe the situation is in your favor. 2. Every trade is a guess. 3. Learn what to guess "AT" 4. Be disciplined about taking risk and exercising stops. 5. Simplify your thinking. Then, when you've simplified all you can, simplify again! K.I.S.S. The #1 factor in overall success is stop discipline. You must get that right away. If you don't, you'll not survive long enough to get the rest of it.
On a website such as this, you never see the unsuccessful traders. Since they were unsuccessful, they are not around here to tell their stories. So you have the successful guys on here telling their story, but the dead men tell no tales. Its not hard to find unsuccessful traders in NYC. If you just walk the streets and ask around, many of them can be found. Then again, I would never believe a guy who says he is successful at anything on a message board and only half believe someone if I met them in real life. The reason why I post a thread such as this is because I see so many people coming on here and asking for advice. Its probably that Baron guy under different aliases trying to generate more hits for the site, but then again, some of them might be real. All of this successful trading was done with a downtrending 10 year. The last timeframe of the uptrending 10 year was a nasty route indeed during that 16 year time period. I foresee great changes in the times to come. One telling sign is Warren appearing to go through his old route again that he performed during the late 60s. Why is he concentrating on JNJ where all the patents are coming due? I wonder if a time will come again when homeless people are being recruited into large brokerages because all the MBAs wouldnt take such a horrible job...